Don’t Let the Pension Time Bomb Explode
Last spring, I wrote about the municipal atomic bomb that threatens to decimate L.A.’s treasury and potentially lead to bankruptcy. The City of L.A.’s public pension crisis continues to grow, but fortunately our leaders are now prepared to act. Difficult decisions must be made to pull us back from the brink.
By 2015, Los Angeles will need $2 billion every year to fund its public employee pension plan, five times as much as the $400 million budget deficit the City faced this year. Unless action is taken soon, these pension contributions will consume the money the City needs to hire more police officers, respond to fires, repair our streets, pick up our trash, mow the grass in our parks and maintain our other municipal services. The good news is that Mayor Antonio Villaraigosa and the City Council are now focused on this crisis.
A Holiday Gift for the Children of California
While most Californians may be busy preparing for the holiday season, a debate is raging in Sacramento that will impact the quality of our state for years to come.
The debate is about public education reform and the outcome will impact the earning capacity of our young people and the ability of California business to compete in the global economy for generations.
At stake is California’s share of $4.35 billion in Race to the Top funding from the Obama administration. The money is an incentive to states and local school districts to dramatically reform and improve public education in America.
So what is happening in Sacramento? On Nov. 3, the Senate passed a Race to the Top bill that would qualify California schools for funding and was hailed by reformers as a major step toward improving student achievement. But last week, the Assembly Education Committee failed to support the Senate bill on a vote of 6-5 with six abstentions. Instead it passed its own version, which has some positive elements, but overall is too watered down and meant to appease the unions for teachers and administrators.
Business is Proud of the Progress at LAPD
At last Thursday’s swearing-in ceremony for new Police Chief Charlie Beck, Angelenos were reminded of the enormous progress made by the Los Angeles Police Department since the 1992 riots. The atmosphere and speeches at this milestone event confirmed that the once maligned police department has regained the trust, confidence and faith of residents throughout the city. That’s good for our community and a very positive sign for businesses.
Beck’s 32-year professional career at LAPD embodies these changes, from his days in the notorious CRASH anti-gang unit to partnering with civil rights groups and community activists. We knew it was a historic day when former Chief Daryl Gates and former State Sen.Tom Hayden—one of LAPD’s fiercest critics, shared the dais in support of the new chief. Their presence was a reminder that Chief Beck’s tenure with the department links its history as the inspiration for the hard-nosed Dragnet television series and recipient of a federal consent decree to its reputation today as a model for community policing and data-driven crime fighting.
Vote Yes For Jobs
How can the Los Angeles City Council keep hundreds of professional careers here in Los Angeles while creating opportunities for thousands more jobs? Make it easier and more attractive for Internet-based companies to do business in our community. Next week, the Council will consider a Chamber-supported motion to do just that and we urge them to act quickly.
The problem is that the city’s business tax code does not include a category for Internet-based businesses. As a result, these companies often select “Multimedia” as the tax category which best fits their operations. Recently, the city’s Department of Finance notified some of these companies that they are being moved into a higher tax bracket and must now pay up to 500 percent more in gross receipts taxes. One firm’s tax liability would jump from $200,000 to more than $1 million per year. Another company is currently in litigation with the city over its reclassification, after winning the same court fight several years ago.
Giving Thanks in Our Community
This is a special week in America. It is a time to pause and do something we never do frequently enough, which is to say thank you. Thank you for our blessings. Thank you to our families for their love. Thank you to our friends for their support. And thank you to the community that has stepped forward to offer their help to those who are unemployed during our most difficult economy since the Great Depression.
Last week, our nation celebrated Veterans Day to commemorate a group of citizens who have protected us day and night, even though we seldom think about them unless we are in a time of war. Now is one of those times, and we join together in saying thank you to our men and women in uniform, both past and present.
At the Plymouth Colony in 1621, the Pilgrims thanked God for the fruits of their first harvest in the new world. They also thanked their new friends, Native Americans from the Wampanoag tribe for enabling them to survive the bitter winter of 1620-21. The Native American community that surrounded the Pilgrims literally saved their lives.
We Must Join the Race to the Top
There is a nationwide footrace underway for more than $4 billion in federal education funding. Just a few weeks ago, California appeared to be out of the running. But fortunately, lawmakers have the opportunity to approve legislation that would not only make our state eligible, but also implement some far-reaching education reforms.
Earlier this year, President Barack Obama’s administration laid out a bold vision to reform education in the United States by introducing a $4.35-billion competitive grant known as Race to the Top (RTTT), of which California could be eligible for up to $700 million. This aggressive agenda challenges California leaders to develop a plan that addresses critical issues including the achievement gap, low achieving schools and dropout rates.
Gov. Arnold Schwarzenegger and state lawmakers, including State Sen. Gloria Romero, made the right decision to accept President Obama’s challenge and implement the reforms required for RTTT funding. Romero authored SB X5 1, which outlines a plan for turning around the bottom 5 percent of lowest achieving schools; removes the cap on the number of charter schools; authorizes greater use of data to improve instruction and student learning; and ensures that innovative strategies are in place in every school.
Making Jobs a Priority at City Council
Good news to report from L.A. City Hall this week: The L.A. City Council introduced a motion that would create the L.A. Area Chamber-proposed Office of Economic Analysis to help answer the question, “How would this law impact jobs?” Enacting this motion will encourage city officials – and the public – to discuss how new policy proposals would affect private sector job creation, business growth and the overall economy here in Los Angeles.
This proposal – based on the model established in San Francisco – would establish a small office of trained economists charged with analyzing legislation that may have a direct impact on the economy. The goal is to provide unbiased, quantifiable information that lawmakers can use to assess or improve legislation and avoid counterproductive policy proposals.
Independence and objectivity are essential to making this new office a success. The Chamber along with our fellow business organizations will be vigilant in ensuring that the new office is structured to be as free from political influence as possible.
Water Reform Has Not Dried Up
The California Legislature has the opportunity this week to quench the thirst of the public for leadership from Sacramento by passing the most significant water reform legislation in the past 50 years. Not only would this be landmark legislation for our state, it would demonstrate that bipartisan work can be done in our state capitol.
Late last night, the State Senate passed legislation that would create a new governance model for managing the Sacramento-San Joaquin River Delta, increase water conversation goals for the state and fund major water-related infrastructure projects through a nearly $10 billion bond package. Two other bills that would increase penalties for illegally diverting water and require local agencies to monitor underground water levels fell short of passage, but are expected to come back up today.
Since the entire package of bills must pass in order for any of the individual bills to go into effect, legislative leaders are working furiously today to approve the remaining two bills on the Senate side and then secure passage in the Assembly. This is heavy lifting, but there is a unique level of resolve by both Republicans and Democrats to get this package approved. That’s a good sign for California.
Planning to Move
When L.A. County voters assessed themselves a half-cent sales tax increase for transportation investment in November 2008, the county’s elected officials promised to deliver a final Long Range Transportation Plan (LRTP) detailing how the Los Angeles County Metropolitan Transportation Authority (Metro) will direct $298 billion in revenue between now and 2040. After approving the 30-year blueprint last Thursday, that time is now.
The LRTP lists dozens of projects including the Subway to the Sea, extending the Green Line to LAX, expanding the successful Orange Line service in the Valley and expanding HOV lanes on the I-5, I-405 and I-10 freeways.
is now.
Transportation projects are an economic stimulus in the short term and an economic investment in the long term. They create good paying jobs from design phase to construction. And the sooner we place shovels in the ground, the more likely we will be to take advantage of the current dip in construction material costs. The Chamber looks forward to continuing to work with our partners at Metro and our elected officials to do everything possible to speed up the approval process. Just like sitting idle on the freeway, wasted time leads to wasted money.
is now.
It’s Time to Get Down to Business in Los Angeles
More than 400 business, labor and community leaders will descend upon Los Angeles City Hall this Thursday morning with a unified message: It’s time to get down to business. Now facing 12.7 percent unemployment and a half billion dollar budget deficit, we must focus 100 percent on new and collaborative actions that will spur our economic recovery and usher in an era of fiscal responsibility.
The L.A. Area Chamber has published a 16-point advocacy agenda recommending concrete steps that will create good-paying jobs, protect taxpayer money and increase desperately-needed revenue for the city without raising taxes. These are common sense priorities that will focus business and government in Los Angeles on the most important job today: economic recovery.
Last week, the City Council took important steps forward on two of these key priorities — pursuing another round of business tax reforms and exploring the creation of a DWP ratepayer advocate. Our call for the City to require an Economic Impact Analysis on major legislation is also gaining traction. This is important progress, and I applaud the Chamber members who have been assisting us in advocating for these initiatives and many others.